The Process
How DSCR Loans Work — A Complete Step-by-Step Guide
DSCR loans are simpler than conventional mortgages because they don't require personal income documentation. Here's exactly how Coastal Funding Corporation takes you from application to closing on your investment property.
Identify Your Investment Property
Find a single-family, multi-family, condo, or short-term rental property you want to purchase or refinance. The property must be non-owner-occupied — DSCR loans are for investment properties only.
- Single-family residences (1–4 units)
- Condos and townhomes
- Multi-family properties (5–8 units)
- Short-term rentals (Airbnb/VRBO)
- Vacation homes used as rentals
Determine the Rental Income
For a purchase, a licensed appraiser will provide a market rent estimate (Form 1007 or 1025). For a refinance of an existing rental, the current lease agreement is used. For short-term rentals, 12 months of platform income statements or an STR market analysis is used.
- New purchase: appraiser market rent estimate
- Existing rental: current signed lease
- Vacant property: appraiser market rent
- STR: 12-month platform income history
- No personal income documents required
Calculate Your DSCR
Divide the gross monthly rent by the monthly PITIA (Principal + Interest + Taxes + Insurance + HOA). Coastal Funding can approve loans with a DSCR as low as 0.75. The higher your DSCR, the better your rate.
- DSCR ≥ 1.25 — Best available rates
- DSCR 1.0–1.24 — Standard investor pricing
- DSCR 0.75–0.99 — Eligible, slightly higher rate
- DSCR < 0.75 — May require additional review
- Formula: Monthly Rent ÷ Monthly PITIA
Submit Your Application
Apply online through Coastal Funding's secure application portal. Because DSCR loans don't require personal income documentation, the application is significantly simpler than a conventional mortgage.
- No W-2s or tax returns required
- No employment verification
- Credit report pulled (620+ minimum)
- Property address and purchase price
- LLC or entity information if applicable
Property Appraisal & Underwriting
A licensed appraiser evaluates the property's value and market rent. Coastal Funding's underwriting team reviews the DSCR calculation and property details. Because underwriting focuses on the property — not your personal finances — approvals are typically faster than conventional loans.
- Full appraisal with market rent analysis
- Title search and insurance
- Property insurance verification
- DSCR ratio confirmed by underwriting
- Typical approval in 7–14 business days
Close & Start Collecting Rent
Once approved, you'll receive a Closing Disclosure and schedule your closing. Coastal Funding coordinates with the title company to ensure a smooth, on-time closing. After closing, your investment property is ready to generate rental income.
- Closing Disclosure issued 3 business days prior
- Wire or cashier's check for closing costs
- LLC vesting available at closing
- Typical closing in 21–30 days from application
- Repeat the process for your next property
What You'll Need
Documents Required for a DSCR Loan
Compared to a conventional mortgage, the DSCR loan documentation list is remarkably short. No tax returns, no W-2s, no pay stubs.
Government-issued ID
Driver's license or passport
Credit authorization
For credit report pull
Property address
Purchase contract or property details
Lease agreement
For existing rentals only
Entity documents
LLC operating agreement if applicable
Bank statements
For reserves verification (2–3 months)
Ready to Get Started?
Apply online in minutes or call Coastal Funding Corporation's DSCR specialists for a free consultation. We'll walk you through the entire process.